NOTE 17. LOSS RECOVERY

In September 2021, the Company was the victim of a business email compromise cybersecurity incident that affected its accounts payable function and led to approximately $9.5 million in wire transfers being misdirected to fraudulent accounts. Upon discovery of the fraud, the Company retained third-party cybersecurity experts and reported the matter to the Federal Bureau of Investigation (the “FBI”). The Company recorded the loss as a separate component of operating expenses in its 2021 consolidated financial statements. After a series of investigations, the FBI was able to trace and seize a portion of the misappropriated funds. The Company received recovered funds of $4.6 million on December 4, 2024. The proceeds from the recovery were recorded and classified within the Company’s Consolidated Statements of Operations as a separate component of operating expenses, consistent with the initial recognition of the loss in 2021.

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